Fannie Mae eliminated Limited Review for condos — here's what replaced it

Starting August 3, 2026, every established condo project needs a Full Review before a Fannie Mae loan can close. If you're financing in Edgewater, Midtown, or anywhere in Miami's vertical market, this changes your timeline and your lender checklist.

Published September 28, 2026

For years, one of the go-to financing shortcuts for buyers of established condos was Limited Review — a lender certification that bypassed the full project questionnaire. You bought a unit in a project with more than 90 days of sales history and a solid owner-occupancy ratio, and the lender could skip the association interrogation. That option is gone.

Fannie Mae's Lender Letter LL-2026-03, issued March 18, 2026 and effective August 3, 2026, eliminates Limited Review for all established condo projects. Every Fannie Mae loan on a condominium now requires a Full Review, no exceptions for project age or prior approval status.

What Limited Review was

Limited Review let lenders approve condo loans without obtaining a project questionnaire from the homeowners association. For a buyer, it meant faster closings and fewer surprises — the lender didn't need to know the association's reserve balance, litigation history, or insurance coverage details. For sellers, it meant a larger pool of buyers who could finance quickly.

In the Miami market, Limited Review was especially common in stabilized buildings in Edgewater, Midtown, and the Design District where owner-occupancy ratios were above the Fannie Mae threshold and the projects had years of recorded sales. Lenders used it routinely. That changes now.

What Full Review requires

Under Full Review, the lender must obtain a completed condo project questionnaire — typically Fannie Mae Form 1076 or an equivalent — from the association or its management company. The questionnaire covers several categories that directly affect whether the project is eligible for Fannie Mae financing.

Reserve funding. Effective January 4, 2027, Fannie Mae requires reserves to represent at least 15% of the annual budget. Before that date, the prior 10% threshold applies. If the association's current budget allocates less than 10% to reserves, the project fails Full Review and no Fannie Mae loan can close in that building.

Litigation. Any pending or threatened litigation that is material to the financial condition of the association must be disclosed. A lawsuit over a construction defect or a dispute with a major vendor can trigger additional lender scrutiny or an outright project decline.

Insurance. The association's master policy must meet Fannie Mae coverage requirements. Flood insurance is separately required for units in FEMA Special Flood Hazard Areas, regardless of the master policy's terms.

Investor concentration. LL-2026-03 retired the prior 50% investor cap rule. The new approach is risk-based: projects with high investor ratios require additional documentation, but there is no automatic project failure based on a percentage threshold alone.

Deferred maintenance. The questionnaire asks directly whether the association has identified any condition requiring significant repair or replacement. Buildings subject to Florida's structural integrity reserve study requirements will need to square their SIRS findings with the Fannie Mae questionnaire answers.

What changed for Florida specifically

LL-2026-03 retired PERS — the Project Eligibility Review Service — for Florida projects. Previously, lenders could submit a Florida condo project to Fannie Mae for a PERS determination, and an approved PERS project carried the review forward for a set period. That pathway is closed. Florida projects are now reviewed loan-by-loan under the standard Full Review criteria.

The lender letter also expanded the Condo Project Waiver to cover projects with ten or fewer units, up from the prior threshold. Small boutique buildings in South Beach, the Roads, or Coconut Grove that previously fell outside Waiver eligibility now have a path to expedited review if the lender chooses to apply for it.

What this means in practice

Two things slow down: the questionnaire turnaround and the lender's underwriting once the questionnaire arrives.

Many Miami condo associations use management companies that charge for questionnaire completion and take ten to fifteen business days to return them. Buyers who were budgeting for a thirty-day closing now need to build that window in explicitly. Some lenders will not start underwriting until the questionnaire is returned and approved — meaning the clock does not start until the association responds.

I have seen transactions stall because a buyer assumed the building was "pre-approved" from a previous deal in the same complex. That concept no longer exists the same way. Each loan requires its own fresh Full Review, and a building that cleared review six months ago may not clear today if reserves have dropped or a lawsuit has been filed since then.

For buyers in Edgewater, where newer towers have HOA budgets still stabilizing after close-out, the reserve percentage check is the one to watch. A building that opened in 2022 and allocated 8% of its budget to reserves in year one may have corrected by 2026 — but the questionnaire will show whatever the current approved budget says, and the lender compares that to the 10% floor, moving to 15% after January 4, 2027.

What sellers should know

If you are selling a unit and a buyer needs Fannie Mae financing, you have a practical interest in making sure your association is cooperative with questionnaire requests. A delayed or incomplete response from management can push a closing date or give a buyer grounds to cancel under a financing contingency.

It is worth confirming before you list: Does your HOA have a process for lender questionnaires? What is the current reserve percentage in the approved budget? Is there any pending litigation that would appear on a Form 1076? Knowing the answers before an offer arrives puts you in a stronger position to price the property and set realistic closing timelines — and to explain the building's situation to a buyer's agent before they discover it in underwriting.

Questions people actually ask

Does this apply to FHA and VA loans too?

No. LL-2026-03 is a Fannie Mae guideline change. FHA and VA have their own condo approval processes — FHA requires project approval on their approved condo list system, and VA has separate requirements administered through the VA Lender Handbook. If a buyer is using FHA or VA financing, the Fannie Mae changes don't directly apply, though FHA has been moving in a similar direction on project documentation since the Champlain Towers collapse in 2021.

What if the building has a PERS approval from before August 2026?

LL-2026-03 retired PERS for Florida effective August 3, 2026. A prior PERS approval does not carry forward for new loans originated after that date. The loan requires a Full Review regardless of the PERS history.

Can a buyer use a portfolio lender instead?

Yes. Portfolio lenders — banks and credit unions that keep loans on their own balance sheet rather than selling to Fannie Mae — are not bound by Fannie Mae guidelines. Their condo review requirements vary by institution. The tradeoff is typically a higher rate and different term options. For buyers who need to close quickly in a building with reserve or litigation issues, a portfolio lender may be the only conventional path to financing.

What happens to a special assessment on a Full Review?

Lenders treat a pending special assessment as a material fact. If the questionnaire discloses a special assessment, the lender will want to know the amount, the purpose, and whether the unit being purchased has already paid its share or whether the liability transfers. An unpaid assessment that transfers to the buyer typically needs to be factored into underwriting — either counted as an additional monthly obligation or paid off at closing.

Stefania Riverin, Licensed Real Estate Sales Associate, FL SL3620067, brokered by NB Elite Realty. This post summarizes published Fannie Mae guidelines and is not legal or lending advice. Loan eligibility depends on the individual borrower's qualifications and the specific project's compliance with guidelines in effect at the time of application.